FX Weekly Wrap: Dollar mixed vs G10 peers, but DXY still downbeat

USD

Off worst levels, but mainly due to more pronounced weakness in some major currency counterparts, and the Index backing away from 94.000 every time it attempted to rebound from sub-93.500 lows.

GBP

A triple dose of top-tier data (softer than forecast CPI, mixed jobs/earnings and better than expected retail sales) and barrage of BoE speak did little or nothing to change dovish UK monetary policy perceptions, so Sterling was largely left watching Brexit headlines (and external impulses) for direction again. Cable is ending the week close to 1.3200, having explored both sides of that handle on fluctuating and fluid news regarding domestic politics and the UK-EU divorce negotiations. Eur/Gbp also volatile, but ultimately recoiling from a fleeting 0.9000+ spike.

Eur

Very sticky around the 1.1800 level vs the Usd, but underpinned overall by upbeat German/Eurozone/ECB impulses. Decent option expiries also kept the headline pair contained at various times during the week.

JPY/CHF

Both safe-haven beneficiaries vs the Usd on balance, with Usd/Jpy down to successive sub-112.50 multi-month lows and Usd/Chf nearer 0.9900 from parity-plus levels at one stage. However, Eur/Jpy is firmer on the week and Eur/Chf rallied to a new peak since the SNB removed the 1.2000 peg back in January 2015 (around 1.1720 before easing back, with more verbal intervention from the Swiss Central Bank in the form of ‘highly valued’ in the mix).

CAD

Weaker on more cautious BoC policy guidance and CPI data showing a slowdown in the headline y/y rate (to 1.4% from 1.6%). Usd/Cad climbed to 1.2800+ and took out offers at 1.2820 before drifting back.

AUD/NZD

The worst performers on a combination of negative political factors, downbeat data points and dovish RBA/RBNZ policy inferences, and now looking technically weak on the break of key levels – Aud/Usd under 0.7550 and Nzd/Usd below 0.7900. A modicum of comfort for the Aud as the cross vs the Kiwi has rebounded over 1.1100 again having dipped to sub-1.1000 earlier in the week.